A senior high quality person, who I trust, who recently spent several years trying to promote prediction markets, reports the following relevant quotes: A G7 government official and advisor to their head of state:
I get most of this actually, but it seems that it should be possible to tackle by redirecting the flow of information. In the CEO example, let him alone consult the market, and choose what to do with the information. Yeah, not stellar in terms of efficiency gains, but far better than nothing (and there is an argument to make for retaining the current corporate form, which empowering the Board too much will disband).
Why would these elite individuals to embrace a tool that may subvert their oracular vision? Would one expect Ned Ludd to embrace automation? Would one expect Lenin to embrace the market? If prediction markets do convey a competitive advantage this feedback is evidence, if not proof, that the competition for these elite positions is more political than market based.
Another thought is the theory that humans decide first, then rationalize the decision. These prediction markets can't be relied on to provide the "right" rationalizations. Flunkies or consultants are pretty good at that job already.
A prediction market might be useful for companies and institutions in competitive environments. There prediction markets may face a different challenge. Being subject to competition, these companies may already have methods to efficiently gather information from the workforce, i.e. bottom up, and "prediction markets" may have to compete to supplant them in the marketplace.
Is the pattern that the senior high quality person spent many years talking to people that would not (perceive themselves to) benefit from prediction markets rather than people that would?
Snark aside, if prediction markets are a so-called sustaining innovation, then incumbents like the ones above might be expected to recognize their value. However, if prediction markets are a disruptive innovation, then it would make sense that incumbents would reject them and that early adopters would likely be non-incumbents, who would evaluate prediction markets along different dimensions from the ones that incumbents use.
Who would be least concerned about shaping narratives and most concerned with objective truth? Did the senior high quality person talk to many hedge fund managers and proprietary traders? They have much different objectives than a bank CEO, btw.
I think it is not an overall advantage on the free market. Prediction markets do offer the advantage you mention, but if we take these quotes on face value, they also have the disadvantage of handicapping management.
"Controlling the narrative" is not something these higher ups want to do selfishly, but it is a necessary function for the organization as a whole.
Some of this seems a little dubious. For example, the bank CEO appears to be responding to a sales pitch from someone trying to sell him a prediction market product for risk assessment. But then why does he refer to it with a verbose marketing term like "your crowdsourced real-time risk radar"? That's something the salesman would say, not the bank CEO. It would be more plausible in that context for the CEO to say something concise and less buzzwordy, like "your product." So, that quote is probably a paraphrase at best, rather than a direct quote.
Very frustrating. Still, this does not answer the question of why they don't win in a free market. Even if 99% of CEOs feel this way, fast access to the truth should be a big advantage for the 1% who choose to use prediction markets, no?
I get most of this actually, but it seems that it should be possible to tackle by redirecting the flow of information. In the CEO example, let him alone consult the market, and choose what to do with the information. Yeah, not stellar in terms of efficiency gains, but far better than nothing (and there is an argument to make for retaining the current corporate form, which empowering the Board too much will disband).
Why would these elite individuals to embrace a tool that may subvert their oracular vision? Would one expect Ned Ludd to embrace automation? Would one expect Lenin to embrace the market? If prediction markets do convey a competitive advantage this feedback is evidence, if not proof, that the competition for these elite positions is more political than market based.
Another thought is the theory that humans decide first, then rationalize the decision. These prediction markets can't be relied on to provide the "right" rationalizations. Flunkies or consultants are pretty good at that job already.
A prediction market might be useful for companies and institutions in competitive environments. There prediction markets may face a different challenge. Being subject to competition, these companies may already have methods to efficiently gather information from the workforce, i.e. bottom up, and "prediction markets" may have to compete to supplant them in the marketplace.
Is the pattern that the senior high quality person spent many years talking to people that would not (perceive themselves to) benefit from prediction markets rather than people that would?
Snark aside, if prediction markets are a so-called sustaining innovation, then incumbents like the ones above might be expected to recognize their value. However, if prediction markets are a disruptive innovation, then it would make sense that incumbents would reject them and that early adopters would likely be non-incumbents, who would evaluate prediction markets along different dimensions from the ones that incumbents use.
Who would be least concerned about shaping narratives and most concerned with objective truth? Did the senior high quality person talk to many hedge fund managers and proprietary traders? They have much different objectives than a bank CEO, btw.
I think it is not an overall advantage on the free market. Prediction markets do offer the advantage you mention, but if we take these quotes on face value, they also have the disadvantage of handicapping management.
"Controlling the narrative" is not something these higher ups want to do selfishly, but it is a necessary function for the organization as a whole.
I need to go take a shower now.
Cass Sunstein?
Some of this seems a little dubious. For example, the bank CEO appears to be responding to a sales pitch from someone trying to sell him a prediction market product for risk assessment. But then why does he refer to it with a verbose marketing term like "your crowdsourced real-time risk radar"? That's something the salesman would say, not the bank CEO. It would be more plausible in that context for the CEO to say something concise and less buzzwordy, like "your product." So, that quote is probably a paraphrase at best, rather than a direct quote.
“The objective truth should never be more than optional input to any structural narrative in a social system.”
this insight is why they're partner level.
Very frustrating. Still, this does not answer the question of why they don't win in a free market. Even if 99% of CEOs feel this way, fast access to the truth should be a big advantage for the 1% who choose to use prediction markets, no?
Nope.
A senior high quality person, who I trustIs that person you? :)